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Entries in FLSA Exemptions
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Now that a couple of months have passed since the Department of Labor announced the new federal overtime regulations, many employers are looking for guidance. Our Labor & Employment Group has been working tirelessly to ensure its clients and the community-at-large have resources for determining whether they will be affected and how to comply.

Our attorneys have spoken with journalists and drafted articles on the topic to provide insights to businesses throughout the region and across industry sectors. For your convenience, please find some of these articles below:

The Supreme Court issued its decision today in Encino MotorCars, LLC v. Navarro. A background of the case is available here, but the question at issue was whether service advisors at car dealerships are exempt from the FLSA’s overtime pay requirements.

You likely received notice that the U.S. Department of Labor released its final overtime regulations on May 18. Many education institutions will now be required to take steps to revise their pay practices and work distribution. This poses difficulties for education institutions of all sizes, whether at the elementary, secondary, or post-secondary level. We hope you find the below information helpful in analyzing how your institution will be affected.

Step 1: Does this new FLSA salary minimum apply to employees of my institution?

Yes, but there are some exceptions. Generally, in order to be exempt from the overtime requirements as an executive, administrative, or professional employee, the employee must be paid above the new salary minimum of $47,476 per year (or $913 per week). Pertinent to education institutions, however, the salary threshold does not apply to employees whose primary duty is “teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge.”

You likely received notice that the U.S. Department of Labor released its final overtime regulations on May 18. Many non-profits will now be required to take steps to revise their pay practices and work distribution. This poses difficulties for non-profits of all sizes, including those that are funded by government grants and contracts, as well as those with limited staff. Whether you are the executive director of a non-profit or serve as a board member, we hope you find the below information helpful in analyzing how your organization will be affected.

Step 1: Does this new FLSA salary minimum even apply to my organization?

Yes. While many organizations may argue they do not have annual revenues (volume of sales or business) of over $500,000, that, in and of itself, is insufficient to conclude that your organization is not covered by the FLSA.

The Department of Labor released its long-awaited final overtime regulations today. The most significant impact of the new regulations is that they more than double the salary threshold for classifying an employee as exempt from the overtime requirement to $47,476. While slightly less than originally anticipated, this is still a big increase in the salary threshold. Not sure if this will impact you? Chances are it will. The new regulations will likely impact the exemption status of 4.2 million employees, which will result in U.S. employers paying an estimated additional $1.4 billion in wages in just the first year of implementation.

If you have not already begun to do so, now is the time to start thinking about and analyzing how the new regulations will impact your business. We hope that the following information is useful to you as you consider your next steps.

Click on the image to download a print-friendly version of this decision chart.Further Impacts to Consider…

How will this impact employee morale?

What should I communicate to employees about the change?

How will this impact financial planning for my business?

What additional training do my managers need?

Do I need new policies that address these changes?

Determining whether you are impacted by this change is relatively simple—it’s how to respond to the impact that is more difficult. Verrill Dana’s Labor & Employment attorneys are here to help. We can help you analyze the impact of these new regulations on your business and develop a plan that incorporates best practices for how to respond to these changes to minimize the impact on operations.

BNA Bloomberg is currently reporting that yesterday word was leaked from a Washington staffer that the DOL white collar salary threshold will be in the $47,000 per year range—as opposed to the $50,440, which has been proposed. The $47,000 range is still almost double the current $23,660 level. Reports have been made by policy advisors that this decrease in the proposed salary cap will decrease the number of individual employees affected from 13.5 million to 12.5 million people.

For more on how to respond to the likely salary increase, check out our previous post here. As we have noted, now is the time to do a full wage and hour audit to determine the effects this change will have on your pay practices. Contact a member of Verrill Dana’s Labor & Employment Practice Group to discuss more.